"The one thing Republicans never can appear to do is to be perceived as coddling" crooked chief executives, said Stuart Rothenberg, an independent political analyst, said. "I think they were suitably outraged and upset over corporate abuses."
The Bush administration has been tough on crimes against investors, but it has not been tough on business across the board. When it comes to areas such as environmental protection and occupational and drug safety, corporations often have had their way, according to critics.
Former WorldCom chief executive Bernard J. Ebbers was escorted in handcuffs when he turned himself in earlier this year. The Corporate Fraud Task Force was created a month after his company announced its bankruptcy in 2002.
(Daniel Acker -- Bloomberg News)
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Cracking Down on Corporate Crime More than two years after the creation of the Corporate Fraud Task Force, federal prosecutors and securities regulators have helped charge and convict a number of high-profile executives.
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Earlier this month, the Environmental Integrity Project, a public interest group founded by a former Environmental Protection Agency lawyer, issued a report criticizing the agency's lax enforcement in cases against big power companies. The Labor Department's Occupational Safety and Health Administration has slowed down rulemaking on workplace safety and has been more closely allied with trade associations and businesses since the Bush administration took over in 2001, according to critics. And the Food and Drug Administration has been criticized for allegedly trying to suppress negative findings about popular drugs. Agency spokesmen have vigorously denied those allegations.
Task Force's Message
The Bush administration Corporate Fraud Task Force follows other federal task forces created in previous administrations to tackle problems such as gun violence and campaign finance. Former prosecutors say the task force helped to focus a vast bureaucracy, marshal resources and send a message to prosecutors nationwide that they could win acclaim by attacking sophisticated business fraud, which in the past was sometimes thought to be too difficult and time-consuming to pursue.
The work of prosecuting corporate crimes spread out from the elite securities fraud unit in Manhattan over the past two years to prosecutors in Birmingham, Harrisburg, Houston, Los Angeles, Newark and Topeka.
"I think you see state, local and federal prosecutors all over the country doing sophisticated white-collar fraud prosecutions," said Mary Jo White, the Manhattan U.S. attorney in the Clinton era. "It's good, in terms of the deterrence message it sends."
But, White cautioned, the newfound interest in business investigations also may have led to overreaching by inexperienced prosecutors unschooled in distinguishing between crimes and violations of accounting rules, historically the turf of private litigants and the SEC.
Track Record
Not all of the prosecutions have been successful. Late last year federal prosecutors in Detroit dropped securities fraud and conspiracy charges against two former Kmart Corp. executives in the middle of the trial, after a pivotal witness contradicted herself on the stand. Separately, a jury acquitted two former Qwest Communications International Inc. officials in April after a seven-week trial. The men had faced more than a decade in prison based on allegations they had improperly inflated revenue at the telecommunications company. A Denver jury deadlocked on charges against a third man, who ultimately pleaded guilty to a misdemeanor document-falsification charge last month.
Defense lawyers in some corporate fraud cases also complain that prosecutors have begun to exert heavy pressure on companies to turn in their own employees to prevent the company itself from being charged, under guidelines issued in January 2003 by then-Deputy Attorney General Larry D. Thompson. Thompson, now the top lawyer at PepsiCo Inc., declined to comment through a spokesman.
"They've done probably one of the best jobs in American history in obtaining convictions and ferreting out corporate crime," said Robert J. Giuffra Jr., a former chief counsel to the Senate Banking Committee who represents several clients in corporate fraud probes. "The question ultimately is, where should the line be drawn? . . . The entire Fortune 500 is not a criminal enterprise."
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